Incentives not enough to tackle youth unemployment

Opportunities for teenagers to undertake full-time work have sharply declined over the last 25 years.

ABC

Finding work as a young person was hard enough before the GFC took a hammer to their job prospects. Lucas Walsh says the Coalition's recently announced Job Commitment Bonus is welcome but won't solve the problem on its own.

Policy seeking to address long-term unemployment is welcome as Australia has been experiencing significant levels of long-term youth unemployment for some time now.

Notably, between 2008 and 2011, the percentage of young Australians without a job for a year or more nearly doubled following the global financial crisis. But both Coalition and ALP policy will need to go further in light of deeper changes to the job market.

The Job Commitment Bonus announced by the Coalition this week will offer payments to long-term unemployed young people to get and keep secure work.

The scheme will provide a $2,500 bonus to those aged 18 to 30 who have been unemployed for 12 months or more if they find a job and remain off welfare for a continuous period of a year. An additional $4000 will be paid if they stay in work and remain off welfare. Financial assistance worth $6,000 is also proposed for long-term unemployed job seekers who move to a regional area to undertake a job or $3000 if they move to a metropolitan area. This relocation allowance will only be available to long-term unemployed jobseekers who are receiving Newstart or Youth Allowance.

Policy that targets youth is also welcome, as there are significant differences between the worlds of work for young people in contrast to older members of the working population. For example, unemployment is consistently higher, with levels of youth unemployment hovering around three times the national average. It is reportedly as high as 40 per cent in some disadvantaged suburbs.

But when looking at broader labour market trends, relying on an incentive-based approach has some limitations.

In June 2013, the number of young people reportedly looking for full-time work had increased to its highest rate in 15 years (27.3 per cent). Opportunities for teenagers to undertake full-time work have sharply declined over the last 25 years. Last year, more than one in five teenagers not engaged in education indicated they were trying to find full-time work. The number of teenagers in full-time employment declined from almost 550,000 in 1981 to almost 200,000 in 2012. A large proportion of this drop can be accounted for by growth in the numbers staying in school; nevertheless, life for those seeking jobs has become significantly more precarious.

Figures published annually by the Foundation for Young Australians' How Young People Are Faring indicate that among those in the labour force, three times as many teenagers and more than twice as many young adults had part-time jobs in 2011 compared to the mid-1980s.

Many young people want to work more, but can't. ABS data indicates that in 2011, just under half of those aged 15-19 years preferred to work less than 30 hours per week, while around 28 per cent of underemployed part-time workers in this age group had insufficient work for a year or more. A third of the 814,700 part-time workers who would prefer to work more hours were aged 15 to 24 years.

And part-time work may not lead to full-time work. Teenagers in part-time jobs are only slightly more likely to move into full-time employment than those who are unemployed.

A major concern is for those who are discouraged by the inability to get sufficient work and give up looking. Providing an incentive, such as Job Commitment Bonus, may go some way towards addressing this, but if the work isn't there then its impact will be limited.

The ALP has taken a different approach. In May the Federal Government announced $6.1 million funding to support Making Career Connections projects to complement its National Career Development Strategy. The aim is to "equip students with the skills and knowledge to make effective career decisions". The projects seek to connect young people to working environments and develop the skills required to navigate them. As with the Coalition policy, this approach faces the question of whether stable, secure job opportunities are actually available at the end - although building the skills and competencies in young people to navigate changing labour force conditions, as well as exposure to career possibilities, will be beneficial.

Other approaches are needed - particularly at the business end. For example, the Kickstart Bonus to employers who take on young apprentices appeared to have a positive impact on commencements - in the short term at least.

As the National Foundation for Australian Women (NFAW) points out in its discussion paper launched this week, surveys suggest that getting a job is one of the two key election issues for young voters (along with housing).

This echoes a previous survey by Mission Australia, which in 2011 showed a significant rise in the proportion of young people valuing getting a job, from 16 per cent in 2010 to 22.7 per cent in 2011. To see policy attention given to addressing this concern is a good start, but a more comprehensive approach is needed.

This article draws from a paper commissioned by the National Foundation for Australian Women comparing and contrasting the policies of the major political parties related youth unemployment in the lead-up to the 2013 election.

Associate Professor Lucas Walsh is Associate Dean of Education (Berwick) at Monash University and Senior Research Fellow at the Foundation for Young Australians. View his full profile here.